Nearly half of Australians believe the federal government should cut tobacco excise in a bid to curb the booming illicit cigarette trade, according to new polling.
The research, conducted by independent pollster Spectre Strategy late last year, found 47 per cent of Australians support reducing the tax on cigarettes.
Only 21 per cent opposed the move, while 32 per cent said they were unsure.
Support was even higher in communities where illegal cigarettes are already circulating.
Among respondents who had noticed illicit tobacco in their area, 60 per cent backed a tax cut – compared with just 17 per cent who opposed it.
Sky News host Caleb Bond said the figures highlight growing public concern about the consequences of Australia’s aggressive tobacco tax regime.
“I warned long ago that jacking up the tobacco tax so high that cigarettes become unaffordable, they’re 40 to 50 bucks a pack now.” he said on Friday.
The policy has since fuelled a flourishing black market controlled by organised crime, which according to Bond has resulted in more than 200 firebombings across the country and at least three fatal attacks.
The Spectre polling also found awareness of the illegal trade is widespread.
Three-quarters of Australians say they know about illicit tobacco, while 37 per cent have personally seen illegal cigarettes being sold in their communities.
Among those who have witnessed the trade, nearly eight in 10 believe it is growing.
More than half of smokers and nicotine users admitted they had purchased illegal tobacco, while a quarter of respondents said they had noticed more young people smoking or vaping.
Bond said the numbers show government policy is failing to achieve its intended goal.
Internal tobacco industry estimates suggest organised crime groups could control nearly 40 per cent of the cigarette market by the end of the year.
The polling comes as the debate over tobacco excise intensifies across Australia, with several state leaders warning the soaring tax has helped drive the illegal market.
London-based British American Tobacco chief corporate officer Kingsley Wheaton said the situation has deteriorated rapidly since his last visit to Australia nine months ago.
“I came nine months ago because I wanted to see it for myself and see how bad things had got and I’ve come back now and all that I can see is that the situation has worsened,” he said.
“We now have a situation where two in every three cigarettes sold in Australia are illicit and from the black market, where almost all of our vapour products are illicit, that means 80 per cent of nicotine is illicit in Australia.”
Mr Wheaton said the scale of the illegal trade now places Australia at the very top of the global rankings.
“A year ago, I was saying that Australia was making its way onto the podium of the worst illicit markets in the world,” he said.
“It now stands as a leader on that podium as the worst illicit market in the world.”
He argued the surge has been driven largely by the gap between legal and illegal prices.
In Australia, tobacco excise alone now sits at around $30 per pack, pushing the retail price of cigarettes to roughly $45.
By contrast, illicit cigarettes can sell for about $12.
“There isn’t a market in the world I know where the basic and simple economics of things suggest that when the consumer or the customer is presented with that, they’re going to make the choice to buy the $45 product and not the $12 product,” Mr Wheaton said.
He also warned the explosion of the black market has stripped billions of dollars from the federal budget.
“Perhaps as recently as eight or nine years ago, the Australian Treasury was banking nearly $17 billion per year from tobacco excise,” he said.
“Based on forecast for this fiscal (year), $5.5 billion. That’s a reduction of over $10 billion.
“I think that’s a $10-billion scandal.”
He said the missing revenue is not simply disappearing but flowing into criminal networks instead.
He argued the federal government should consider a significant reset of the excise rate to bring consumers back into the legal market.
“I think it’s now come to the moment where this $10 billion scandal needs to be addressed,” he said.
“That means a simple reset of excise back to 2019 rates. It means a halving of today’s excise.”
Without intervention, he warned the legal cigarette market in Australia could effectively disappear within years.
“If there is no marketplace for us to compete in, that will become a commercial decision,” Wheaton said of the future of tobacco companies in Australia.
“But for now, I think the focus is wrestling the industry away from the criminals who currently run it.”